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ITV looks to international business for growth

Adam CrozierReporting strong full-year results this morning, UK broadcaster ITV said today revenue at its content unit ITV Studios will grow £100 million (US$153.4 million) this year.

It also pinpointed international expansion in its new three-point growth plan.

The content business has been boosted by a wave of acquisitions of production businesses, notably in the US. ITV has also confirmed it is in talks to buy John de Mol’s Talpa, which would be its biggest acquisition to date.

“In 2015 we expect ITV Studios again to deliver around £100 million of revenue growth on a constant currency basis, with a return to good organic growth supported by a full year of the acquisitions we completed in 2014,” ITV CEO Adam Crozier said this morning.

“We will start to see the benefit of our investment in scripted content and we will look to continue to develop our pipeline through further investment in creative talent and content.”

ITV Studios reported revenue of £933 million, a 9% increase year-on-year. International distribution arm ITV Studios Global Entertainment contributed £144 million of revenue in 2014, a 7% increase on 2013. ITV Studios US generated £235 million of revenue last year, a 34% increase.

ITV said today that driving the international business is a key part of its future growth plans. Crozier outlined a five-year transformation plan for the broadcaster in 2009 that has largely been successfully executed with consecutive years of double-digit profit increases.

This morning he outlined what he called “a natural evolution of our current strategy”. The three-point plan involves maximising share and revenue from free TV and VOD, growing the international content business, and building a global pay and distribution business.

“We will continue to rebalance the business and grow new revenue streams and there will be increasing emphasis on international content creation and distribution,” Crozier said.

The 2015 international plans include the development of new pay services and linear channels outside of the UK. The UK broadcaster invested in VOD service Cirkus last year and said it will look at wider partnerships with OTT and VOD players. It will also scale up the international programme sales business with more third-party content deals.

ITV said: “Our strategy is to capitalise on this demand by growing our international production presence, building scale in attractive production markets and developing IP in creative markets that has the ability to travel the world.”

The renewed focus on international came as ITV said its total share of viewing was down 5% in its domestic UK market in 2015. The decline was largely attributed to viewing decreases at the core ITV1 channel.

ITV reported company-wide revenue of £2.95 billion in 2014 compared with £2.75 million a year earlier. Pre-tax profit was £605 million compared with £435 million across the same period.